GitHub is undergoing a full-blown overhaul as execs and employees depart — and we have the full inside story

We've been hearing about a lot of drama going on at $2 billion
startup GitHub, the hugely important and popular site used by
millions of computer programmers where 10 or more
executives have departed in recent months.

The more we write about the inner turmoil, the more people step
forward to share details and opinions.

We're hearing these themes repeatedly:

Cofounder CEO Chris
Wanstrath, with support from the board, is radically changing
the company's culture: Out with flat org structure based
purely on meritocracy, in with supervisors and middle managers.
This has ticked off many people in the old guard.

Its once famous
remote-employee culture has been rolled back. Senior managers
are no longer allowed to live afar and must report to the
office. This was one reason why some senior execs departed or
were asked to leave, one person close to the company told
us.

Others tell us that key technical people from the old days
like CTO Ted Nyman and third cofounder PJ Hyett are
mostly absent from the office and not contributing much
technically.

GitHub has hit "hypergrowth,"
growing from about 300 to nearly 500 employees in less than a
year, with over 70 people joining last quarter alone.

Some longer-term employees
feel like there's a "culture of fear" where people who
don't support all the changes are being ousted.

In addition to previously
reported executive departures, Business Insider has learned
that Ryan Day, VP of business development; Adam Zimman, senior
director of technology partnerships; and Scott Buxton,
controller, have all left in the last six months. Buxton
departed in January.

A GitHub spokesperson declined
to give us a statement but pointed us to a comment made by
Kakul Srivastava, vice president of program management, to
The
Information.

“We’re trying to build a new
kind of enterprise company where the playbooks of old won’t
always work,” she said.

Srivastava is a former
Yahoo and Flickr exec and is part of Wanstrath's new
brain trust. She joined GitHub in July to
revamp its products.

Overhauling the culture

GitHub VP of product Kakul
Srivastava.Twitter

GitHub is a cloud service that programmers use to store their
software projects, share them, and work on them collaboratively
in teams. It's used by individual developers and small startups,
all the way up to large companies like Apple, Google,
and Walmart, and it claims 12 million registered users.

The startup has nabbed $350 million in venture funding from
top firms, including Sequoia Capital and Andreessen Horowitz, and
last year was reportedly valued at $2 billion.

The company has reportedly been cash-flow positive since its
earliest days, and is expected to bring in more than $25 million
this quarter, which puts it on track for more than $100 million
in annual revenue, according
to The Information.

Former GitHub CEO Tom
Preston-Werner shows off the Scotch collection kept at the GitHub
office in 2012.Owen Thomas, Business
Insider

Wanstrath became CEO in 2014 after GitHub was
embroiled in a sexual-harassment scandal by a female
employee who quit.

GitHub's own internal investigation determined that no sexual
harassment took place, but said there were other leadership
issues going on. Ultimately cofounder CEO Tom Preston-Werner
resigned and left the company.

Now Wanstrath is on a mission to overhaul Github, with full
support from the venture capitalists who backed the
company.

About a year ago, he also phased out the company's old
meritocratic structure where no one had managers and
installed a hierarchy, complete with middle managers. Many
of the old-school employees were less than pleased, people told
us. Suddenly one of their peers was their boss. And the
grumblings began.

One person told us Wanstrath "is trying to
keep everyone happy by not making the hard decisions necessary of
leaders." He's been described to us as someone who "hides in
conference rooms" and who is being influenced by an inner circle.

This person tells us that GitHub's top lawyer, Julio Avalos,
"has amassed great power" in the company since Wanstrath took
over. Avalos joined GitHub in 2012 from Yelp,
according to his
LinkedIn profile. In October he was appointed to
chief business officer, as which he runs
corporate-administration functions like legal, HR, and finance.

However, we understand that Wanstrath's
current top leadership team, some of whom have been with the
company for less than a year, do not feel that way about
him.

One person close to the company told us
that Wanstrath, has a "soft-spoken style, is extremely
thoughtful, and a very good listener, listening to perspectives
across company. When he makes a decision, he's direct, open and
rational about it."

Like Facebook circa 2009

Reuters/Robert Galbraith

We also understand that Wanstrath is working extremely
closely with Andreessen Horowitz's Peter Levine and Sequoia's Jim
Goetz, talking with one or both of them almost daily. These
are two of the industry's most respected VC
investors.

One person familiar with Wanstrath's
relationship with these VCs told us they
are "thrilled" with him and with the changes he's been
making at the company.

"Chris wanted to change leadership structure and he made a
set of changes. You're going to see a bunch of
announcements where new folks are joining," this person
said.

"With the benefit of experience, 2-3 years, it's very
similar to a set of anecdotes about Facebook, where Sean Parker
took off and Gideon Yu, and Owen Van Natta and there's all
this drama. And hello? It's a hypergrowth company and
it's a normal upgrade cycle," the person
said.

This person says that it's not a knock against the execs
who left, but "at times you need a different group of people,
when you reach 400, 500 or 1,000 employees."

The person added: "There was a remote
culture and very little hierarchical structure which worked
wonderfully when they were 30 and 50 people, but at 500, it
doesn't work. Chris has decided that the leadership team needs to
be in the building and managing, so remote is not an option for
senior executives."

Ruffled feathers over diversity

One insider criticized GitHub's "social impact
team," which is in charge of figuring out how to use the
product to tackle social issues, including diversity within the
company itself. It's led by Nicole Sanchez, vice
president of social impact, who joined GitHub in May after
working as a diversity consultant.

While people inside the company approve of the goal to hire
a more diverse workforce, some think the team is contributing to
the internal cultural battle.

"They are trying to control culture, interviewing and firing.
Scary times at the company without a seasoned leader. While their
efforts are admirable it is very hard to even interview people
who are 'white' which makes things challenging," this person
said.

Sanchez is known for some strong views about diversity. She
wrote an article for USA Today shortly before she joined
GitHub titled, "More white women does not equal tech
diversity."

At one diversity training talk held at a different
company and geared toward people of color, she came on a bit
stronger with a point that says, "Some of the biggest barriers to
progress are white women." Here's a photo of the talk, which was
shared with Business Insider.

Smith

Smith

Another member of Github's social-impact team, technical director
Danilo Campos, has been known to tweet similarly strong views
about diversity. Campos joined in August with a background
as an iOS developer.

A Danilo Campos tweet.Twitter/Danilo Campos tweet

Another person at the company (who is neither
white nor male) shrugged this criticism off, saying
"Diversity is super complicated and a difficult issue in the tech
industry. Just like change is hard in many ways, you are seeing
change is hard with diversity. But it's an important issue and
something every tech company is addressing."

Winning the enterprise

AP
Images

Underlying the drama is the fact that GitHub is trying
to grow the company's revenues by landing more big
enterprise contracts. And it's doing a good job of that, several
sources — even the disgruntled ones — told us.

And these sales people want the company to create more
products for them to sell.

Meanwhile, the company's millions of developer users, many of
whom use the site for free or for a small monthly
fee, also want GitHub to pay more attention to
them. A bunch of active and influential users sent a
letter inJanuary called "Dear
GitHub"in which they asked for a bunch of product
features, too. At least one person told us that this letter
alarmed some of the leadership team.

Mass exodus coming soon?

Given the growing pains, we've been hearing that the unhappy
engineers would like to bail from the company.

"Employees live in a culture of fear but the pay is at the 95th
percentile and folks just accept the sadly deteriorating
culture," complained one GitHub employee in
a recent review on Glassdoor.

Some of these folks may be hanging out until GitHub
offers some kind of "liquidity event" — a way for longtime
employees or investors to sell some of their shares — which one
person believes could take place soon. (A GitHub spokesperson
refused comment on that.)

With plenty of competitors, including Atlassian, GitLab,
and even
Google, one thing is certain: If GitHub does stumble, there
are plenty of companies that want to pick up its slack.